Q&A: house buying and credit rating?

Question by Ed : house buying and credit rating?
I am looking for tips for first time home buyers? how does good credit affect mortgage?

Best answer:
The better your credit, the lower your interest rate will be. Less interest equals smaller payments. Good credit makes more money available to you so you can buy more house then someone with poor credit.

Comments

Check with the government locally and see what kind of programs are available for first time homebuyers. In my county, the city gives you $ 60,000 if you qualify for the purchase of a home. So if you were buying $ 160,000 you only have to qualify for $ 100,000.

Credit is one of the biggest things as far as getting a loan is concerned. I would find out what my credit score is first and hopefully there is nothing on there that will affect my loan.

Your credit is directly related to the mortgage rate you’ll pay. If the prevailing rate for a 30 year fixed is say 6.25% only borrowers with satisfactory credit ratings will get that rate. Poor credit ratings put you in a higher risk category and you’ll pay a higher interest rate and may be required to purchase PMI.